Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
I agree with you in that we're waiting for Blackrock to complete finance and then see what they do with that regarding infrastructure that we can piggy back off. Only when that is clear and we have the government interest sorted can we produce the updated DFS and move things forward.
As for finance, I agree in this climate it would be tough but assuming we get the government interest sorted, a decent optimised DFS and also, which hasn't been mentioned, the graphite deficit kicks in and graphite prices start to get fruity, then the macro climate becomes less of an issue as offtakers become every more keen to secure supply, especially from a non-Chinese source. We should never forget that we have a lot of a good quality commodity that will be in supply deficit before too long and whatever happens to the economy the EV genie is out if the bottle and companies are going to need an awful lot of what we've got.
Come Christmas or maybe Q1 2023, things will look very different IMO.
Until then, as Dee says, we just have to wait it out.
John de Vries of Blackrock took six months to get the government 16% tied down. Fortunately they were the first under the new regime so that created a template for others to follow so hopefully ours won’t take as long and given we’re well into the process perhaps we’re not far off now.
All eyes on Blackrock to see how they manage with the finance as that will give a roadmap for us. It’ll also reveal what BKT will do infrastructure wise so he can then add the final weeks to our new optimised DFS. Once government interest sorted, BKT finance and in turn optimised DFS completed, we’ll be well on the way. Throw in a graphite deficit starting much earlier than expected (now predicted this year) and the offtakers will certainly be motivated to get a deal signed.
All still looking good if you have a 6-12 month time horizon.
Personally, I’m looking at the valuation that Blackrock gets once it’s finance is complete, that’ll give us the best indication what we should expect once ours is done. Double figures for sure but I don’t see why 15p+ isn’t possible with a fair wind behind graphite.
leathal - echoing wasarunner, great timing but given that construction of the mine is likely to begin in Q2 next year when the dry season in Tanzania starts, I expect everything to be wrapped up finance wise in the next couple of months. I reckon you're safe until December but I suspect things might happen very quickly at any time from that point forward. Having said that, in order for Matt Bull to get the best deal, it may continue into January. Who knows? Good luck with your investment decision, whatever it might be.
Agree 100% Juxtaposition, updates without substance are pointless imo and only given as a sop to needy retail shareholders who need their hand held. Matt has plenty of pending RNS' up his sleeve and will play them at the appropriate time to maximise the share price at the point he needs finance (if he does actually need it given the potential of prepayments). Until then, sit on your hands time and let whoever is selling these big chunks to get on with it in 4's so they don't stymie any rise when the RNS floodgates open.
Warrants are timed to expire just in time to receive the cash prior to construction at the beginning of the dry season in April/May. It’s all a carefully prepared path to production. Just need the ML to begin the process.
If you want big rewards in the mineral sector you have to go to the third world, which unfortunately are not quite as efficient as the first world, especially in Africa. Quelle Surprise!
Matt has had the nod, we are just waiting for the paperwork to follow to make it official. It's completely out of our hands and takes as long as it takes - Matt's hands are tied until then. Once we get it we will no doubt have a tsunami of updates. Until then, we're twiddling our thumbs. No amount of whinging will change that.
Seriously, would Matt have taken shares instead of cash when settling the last of the CLN's if this wasn't going one way. Leave the keyboard and just wait for the inevitable, it's coming.
Until very recently, Kabunga had 14,604,546 warrants at 2.2p and 5,555,554 at 3p. Theoretically if he was short of cash he could exercise those and sell them (say at 5p) and make £520k profit. Depends how much he needs the cash I suppose.
Personally, I'd love him to sell them now; far easier to churn at 5p tan say 10p and also it would give us £488k towards our financing so less dilution long term. Win, win.
No such thing as live pricing as far as I can tell with graphite, it's all very opaque and tricky to pin down. Plus there are so many categories, sizes and purities that it's hard to pigeon hole Mahenge graphite. Until we get the off-takes to give us a more precise steer, it's just educated guesses for now.
I used the base case estimate of $1112/t from page 19 of their latest presentation (http://armadalecapitalplc.com/wp-content/uploads/2020/07/ACP-presentation-2020-07-16-update-FINAL.pdf). That page is particularly useful as it shows the effect of pricing on NPV & IRR.
Price NPV IRR
$1112 $430 91%
$1334 $588 118%
$1500 $655 138%
Baring in mind that when the DFS was written well over a year ago, the base case price even then was conservative relative to it's peers and since then we've had the first phase of the CSIRO study published confirming that their graphite is "considered suitable for use in lithium-ion battery anodes" with it's more lucrative pricing as well as the fact that the graphite market as a whole has moved up significantly since then. Take look at this tweet from Tirupati Graphite in January highlighting the market increase of 8-10% in the previous quarter alone (https://twitter.com/tirupatiuk/status/1346769309872349184?s=21).
I think that once the ML drops, news on lots of fronts will follow in quick succession catching out the 'sell on news' brigade. The delay with the ML has not stopped Matt continuing to make progress on many other fronts concurrently; CSIRO, EPC test work, off-take agreements and of course finance. Personally, I think off-takes are pretty much ready and are just waiting for the ML to be issued before a deal can be inked almost immediately. That deal I predict to be hugely significant as I expect the off-take basket price to be significantly above the base case basket price of $1112/t which underpins the current stated NPV of $430m and thus the market valuation. Scroll down multiple posts to see my thoughts on where I think it should be.
For me, the combination of both the issuance of the ML together with an increased underlying NPV due to that improved basket-price, acting in tandem will move the SP to something more realistic. We're currently worth $37m, take the basket price up to a still conservative price of $1388/t with the NPV then $588m and you can see the potential.
Why do you ask? We already have the ESIA (Environmental and Social Impact Assessment), it was issued on the 30th March. https://www.investegate.co.uk/armadale-capital-plc--acp-/rns/esia-approval-from-nemc-of-tanzania/202103300958189491T/
ESIA is the last step, which completes all the necessary hurdles before the Mining Licence is issued, normally a matter of weeks afterwards, literally as long as the DHSC takes to give it the rubber stamp.
Actually, it wasn't old data, I was looking at the wrong company. Sorry.
As per calcs, correct fully diluted shares = 543m. Everything else correct so 600m fully diluted after financing package would be a reasonable number to use.